Friday, August 15, 2008

Contractors Feared Casino Might Drag Them Into Bankruptcy

Pittsburgh Casino Construction Site

The Pittsburgh casino project's cash crisis had local contractors worried that if Don Barden's company had gone bankrupt owing them tens of millions of dollars, their businesses would have been dragged down with him.

That information came to light during sworn testimony before the Gaming Control Board in Harrisburg. The details were overshadowed by the board's approval of the casino deal at the end of a daylong hearing.

Here are my notes from the testimony.

Dean Mosites, Mosites Construction Company:
• "I think the board knows that we've not received payments for work that was done in April, May, and June. For all of these contractors, that adds up to a tremendous sum of money. And it is enough money to put us in financial jeopardy. Right now, our banks and our bonding companies are looking very closely at our businesses and (are) very, very concerned (about) our businesses moving forward carrying these kinds of receivables."

• "We're in a position now where we have to be very judicious with the money that we spend. We can only spend on essentials. We have to make decisions -- every day I meet with my controller. This is not a situation I've had before in the 30 years I've been in business. I've got to meet with our controller every day and we've got to pick and choose who we can pay and who we can't to keep us moving forward."

• "We wish to avoid the harrowing problems that go with bankruptcy."

• "That is a very real possibility."

• (In answer to the question of how many families would be hurt by such bankruptcies) "I would say as it goes down from the 22 of us, the geometric progression until you get down to the bottom, there's thousands."

Here's a link to raw video of Mosites' testimony.

Others who testified:

Dan Keating, Chairman of Keating Building Corporation, General Contractor for Pittsburgh casino project:
• "If we can't get the work started, those contracts will terminate and the effects will be disastrous."

• "From a practical standpoint, it would be devastating. The people people affected.. are literally thousands. Every subcontractor has numerous sub-subcontractors and vendors that are part of this process. They, their families... would, I think, suffer irreparable damage...It's a frightening would just be devastating."

Rich Stanizzo, Business Manager, Building & Construction Trades Council:
• "If these contractors cannot recoup their money, it is going to change the face of construction in Western Pennsylvania, and it won't be to the better. We do not want to see any of these contractors be faced with going out of business. It's something that we in Western Pennsylvania cannot stand."

Meanwhile, casino spokesman Daniel Fee says logistics delayed transferring money today -- and he says that it will be wired on Monday. He now predicts work at the casino site won't resume until Tuesday.


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